Third-party mutual fund distribution in Europe has grown by two per cent in the past year and now accounts for 33.9 per cent of the total, according to research carried out by Cerulli Associates.

In other words, one in three euros in the European mutual fund industry has come from intermediaries that are not affiliated with the fund manufacturer.

Since 2013, retail investors have made a comeback in the industry. Inflows have increased markedly-even in the most surprising places, such as the South. Spain and Italy have been driving inflows. An increasing proportion of the new money that finds its way into the industry is directed to third-party products.

The main winners from this trend are the large, established cross-border managers. They roll out their expertise in more markets and are capturing increasingly higher marketshare in Europe. More often than not these are American companies, which put their best foot forward in Europe and have a lot of cash to spend on marketing and brand building.

The gradual change in mentality of distributors and institutions in continental Europe is partly why third-party distribution is on the rise. They recognise the weaknesses of their in-house asset management arms and instead use external managers.

"Some managers on the Continent cannot believe how much they struggle to sell products to their proprietary distribution channels. To them it would have been unheard of two or three years ago," says Angelos Gousios, a senior analyst with Cerulli in London, and one of the main authors of Cerulli Associates' recent report entitled European Distribution Dynamics 2014: Responding to Change.